Good morning,


Equities enjoyed a positive week, as some green shoots of optimism began to emerge across the investment landscape. Economic data was mixed, which may be just enough for the Fed to at least pause for thought as the expected next 75bps interest rate hike draws closer. In the UK, the recent political and economic sideshow could well be drawing to a close as the new Chancellor Jeremy Hunt calms markets. Over the weekend, Boris Johnson withdrew his candidacy to return as Tory leader as the party appears to be rallying around Rishi Sunak. There is much left to write in this tale, but on the surface, a combination of Sunak and Hunt would win (at least initially) approval from investment markets, and most importantly gilt investors.


We had mentioned previously that the Q3 earnings seasons would give key insights to the strength of companies in the face of rampant inflation and so far, so good. About 1/5 of companies in the S&P 500 have reported, with nearly ¾ exceeding forecasts – slightly above average. The large banks have come through relatively unscathed and last week Netflix, whose value has halved this year, gained some respite after topping expectations. All eyes on ‘Big Tech’ earnings this week, along with the ECB on Wednesday (0.75% rate hike forecast).


As always, if you wish to discuss anything in this newsletter in further detail, please do get in touch.